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A possibility of a question coming out relating to the oil industry due to what happened over the summer – where the examiner would ask something with regards to decommissioning costs and provisions which need to be created.
In the case of decommissioning costs – a provision is created, while the cost is also capitalised .. right?
In this case can the costs related to getting back the site back to how it was before the oil spill – do we carry out the same treatment or do different issues exist?
Hi – no, I believe it’s the same treatment – called site restoration ( or similar )
Set up a provision in the sum of the best estimate of the present value of the obligation ( legal or constructive ) and then unroll it as each year passes
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